TOKYO, June 11 ― Asian stocks made modest gains today after the Trump administration shelved plans for tariffs against Mexico, lifting Wall Street, however, fresh US trade threats against China are expected to limit any major investor sentiment boost.
US President Donald Trump said yesterday he was ready to impose another round of punitive tariffs on Chinese imports if he cannot make progress in trade talks with Chinese President Xi Jinping at the G20 summit.
The US president has repeatedly said he expected to meet Xi at the June 28-29 summit in Osaka, Japan although China is yet to confirm any such meeting.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.2 per cent. Australian stocks rose 0.9 per cent, South Korea's KOSPI added 0.15 per cent and Japan's Nikkei edged up 0.05 per cent.
US stocks extended their recent climb yesterday, with the Dow rising for the sixth trading day following a decision by the United States to forego imposing tariffs on Mexican goods.
“The lift from the US-Mexico trade development is likely to be a temporary one for the equity markets as the bigger issue between the United States and China remains unresolved,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.
“Nervousness will prevail in the markets until the G20 summit. And there is no guarantee that matters will improve even if the US and Chinese leaders meet at the summit.”
In the currency markets, the dollar gave up some of the modest gains it made against its peers overnight on news that the United States and Mexico agreed on a deal to avoid tariffs.
The dollar was down 0.05 per cent at ¥108.370 (RM4.15) after gaining 0.2 per cent overnight.
The euro edged up 0.05 per cent to US$1.1318 following a loss of 0.2 per cent the previous day.
The dollar index against a basket of six major currencies was a shade lower at 96.731 after advancing 0.2 per cent yesterday.
The benchmark US Treasury 10-year yield stood little changed at 2.141 per cent. The yield had risen about 6 basis points overnight as the US-Mexico deal boosted risk appetite and curbed investor demand for safe-haven government debt.
US West Texas Intermediate (WTI) crude oil futures were up 0.13 per cent at US$53.33 per barrel, finding some traction after sliding the previous day.
Crude oil fell yesterday, with US futures losing 1.3 per cent, as major producers Saudi Arabia and Russia had yet to agree on extending an output-cutting deal and with US-China trade tensions continuing to threaten demand for the commodity. ― Reuters
